Re: notes - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on September 18, 2003 at 11:10:09:
Randy is pretty close on this. A “note” is a promissory note. A statement by somebody that they owe money to some person or institution. It has the terms of the loan: length of time to be paid off completely, the amounts and timing of periodic payment, the interest rate, any penalties for late payments, penalties for not paying off at the agree time, etc.
Then, as Randy notes, there is some security instrument which links the requirement to repay to a property or several properties. The security instrument–usually a mortgage or deed of trust, although there are others–states that if there is default in the payments on the note, then the property can be auctioned off at foreclosure. This tends to make the borrower pay the loan so as not to lose the property in foreclosure.
Good Investing************Ron Starr***************